It was another great month overall for Central Alberta Real Estate. The market is calming to a more normal pace after a whirlwind spring, as was expected to happen as we moved into the summer and saw the potential for covid restrictions to relax. With life back to a mostly normal state in Alberta, people are seizing the opportunity to travel and enjoy the summer with their families.
Sales in June remained steady, with Red Deer selling 205 of the 696 available properties, which translates to a nicely balanced market at 29% turnover, or 3.4 months of inventory. June sales were up 7 units over May, but down 18 from our height of sales in April. Sales will likely start a slow downward trend now after July, with inventory numbers following suit, which is a normal trend at this point in the year.
Single family homes still make up the bulk of our monthly sales, with the market under $600,000 still showing strong sales and high demand. Well kept, updated homes that are priced competitively are still selling quickly, while we’re seeing resistance from buyers to homes that need work or updating, or that are not competitively priced. Buyers generally do not want to do work in the form of rehab or renovations, and they’re willing to pay for the convenience of moving into a turnkey home. It’s much harder for a buyer to get funds for renovations than it was in previous years, with banks having much stricter requirements around lending and line of credit access. With most buyers just pulling together 5% for a down payment, the thought of additional debt and money owed on top of the mortgage can be daunting for some.
Condo sales remain slow, and acreage demand has started slowing down after a very active spring. The duplex/townhouse market has started to show some signs of life after also being a slower segment in the spring, likely due to the increase in prices for single family properties.
Overall, we’re still in a great market to sell, and still in a better position than at any point over the last 5 years. If we start to see economic recovery as is currently being predicted, along with steady or increasing oil prices, we should see this market maintain its current pace. Increased interest rates are our biggest threat currently, as an increase in rates will put pressure on prices, however I don’t believe we’ll see rate hikes until 2022 based on current info.
Surrounding community snapshot:
Current Active Listings – 101
Sales in June – 31
Likelihood to Sell – 30.7% (balanced market)
Current Active Listings – 180
Sales in June – 64
Likelihood to Sell – 36.3% (balanced market)
Current Active Listings – 45
Sales in June – 9
Likelihood to Sell – 22.5% (balanced market)